Australian ANZ posts sharp increase in profits but says expired in home loans


A man talks on the phone outside an ANZ banking tower in central Sydney, Australia on February 20, 2018. REUTERS / Daniel Munoz

  • Shows 65% jump in cash profits to A $ 6.2 billion
  • ANZ’s Australian mortgage volumes fell 1% in the second half of the year
  • Bank prioritized resolving mortgage volume issue

SYDNEY, Oct.28 (Reuters) – The annual profit of the Australian and New Zealand banking group (ANZ.AX) jumped 65% as it released earmarked funds to cover potential bad debts, but he acknowledged that he hadn’t done enough to capitalize on a pandemic. induced boom in mortgage lending.

The bank’s mortgage volumes in Australia fell 1% in the second half of the year to A $ 278 billion, despite a 20% increase in house prices nationwide driven by an unprecedented amount of budgetary expenditure.

“We started the year really well in the home loan business and then of course we saw incredible volume levels in the economy in terms of turnover, people buying and selling homes. Now we haven’t prepared well and it’s my turn to play, ”CEO Shayne Elliott said in a published internal interview.

Since 2019, Australia’s mortgage market share from the country’s fourth-largest lender has fallen 70 basis points to 13.9% in August, to the benefit of its biggest rivals.

By comparison, Commonwealth Bank, the country’s largest lender, increased its mortgage market share in its fiscal year ended at the end of June by 30 basis points to 25.3%. Read more

Elliott said growing ANZ’s home loan portfolio in line with its larger peers by the end of the current fiscal year would be a top priority.

ANZ has hired staff to resolve loan processing times issues and has a team of hundreds of engineers who are building a “cornerstone” online banking and lending service called ANZ Plus aimed at accelerating growth.

Currently, around 56% of its home loans are sold through brokers who do not receive fast enough rating responses from ANZ, the bank said, adding that ANZ Plus, which will launch next year. , will help solve its problem of increasing volumes.

Like many other banks around the world, ANZ has benefited from the release of cash set aside for potential bad debts resulting from the pandemic. Cash income from continuing operations was AU $ 6.2 billion ($ 4.7 billion) for the fiscal year ended Sept. 30, 4% ahead of expectations.

The bank declared a dividend of A $ 0.70 per share in the second half of the year, up 2 cents from the previous half.

ANZ shares were 0.5% higher in afternoon trading compared to a slightly lower broader market (.AXJO).

In New Zealand, a market dominated by lenders, home loans grew 11% over the year and net interest margin, a key measure of profitability, increased 2 basis points to 2 basis points. , 34%.

The Group’s net interest margin increased by one basis point to 1.64%, mainly due to ultra-cheap financing costs.

Elliott said ANZ remains committed to having a cost base of A $ 8 billion two years from now, but reported spending in the current fiscal year will exceed the A $ 8.7 billion it comes from. to declare that it is investing in its new service.

($ 1 = AU $ 1.3303)

Reporting by Paulina Duran in Sydney and Riya Sharma and Nikhil Kurian Nainan in Bengaluru; Editing by Edwina Gibbs

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